LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
April 4, 1997
TO: Honorable Clyde Alexander, Chair IN RE: House Bill No. 2337
Committee on Transportation By: Bosse
House
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on HB2337 ( Relating
to the application of the indirect cost recovery program to
certain indirect costs of the Texas Department of Transportation.)
this office has detemined the following:
Biennial Net Impact to General Revenue Funds by HB2337-As Introduced
Implementing the provisions of the bill would result in a net
impact of $0 to General Revenue Related Funds through the biennium
ending August 31, 1999.
Fiscal Analysis
The bill would add Section 2106.008 to the Government Code relating
to the application of the indirect cost recovery program to
certain indirect costs of the Texas Department of Transportation
(TxDot).
Methodolgy
TxDot estimated that in fiscal year 1996, participation in construction
projects by cities, counties, and other local governmental entities,
subject to the application of the indirect cost rate, was approximately
$34.6M. Using the current indirect cost rate of 7.16%, TxDot
estimated a potential loss of revenue of approximately $2.5M
per year to the State Highway Fund 006 and an equal gain for
local governments. The department assumed that the amount of
participation by local governments and the indirect cost rate
to stay relatively constant in future years.
The probable fiscal implications of implementing the provisions
of the bill during each of the first five years following passage
is estimated as follows:
Five Year Impact:
Fiscal Year Probable Revenue Probable
Gain/(Loss) from Savings/(Cost)
State Highway Fund from All Local
Units of
Government
0006 LCL-ALL
1998 ($2,500,000) $2,500,000
1998 (2,500,000) 2,500,000
2000 (2,500,000) 2,500,000
2001 (2,500,000) 2,500,000
2002 (2,500,000) 2,500,000
Net Impact on General Revenue Related Funds:
The probable fiscal implication to General Revenue related funds
during each of the first five years is estimated as follows:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1998 $0
1999 0
2000 0
2001 0
2002 0
Similar annual fiscal implications would continue as long as
the provisions of the bill are in effect.
Annual savings to local government of $2.5 million is anticipated.
Source: Agencies: 601 Department of Transportation
LBB Staff: JK ,PE ,ML